Robert M. Slutsky Associates
Elder Law Newsletter

May 2006          

Spring is here.  Enjoy the weather.  Read on. . . .

Medicare Part D

You have until May 15, 2006 to sign up for a Medicare drug benefit plan.  If you sign up later you will pay a higher monthly fee.  Please see recent Newsletters for a description of the plan.  Also note that the rules for PACE or PACENET are different.  Contact those programs directly to determine what needs to be done.

Special Needs Families and Estate Planning

Our disability planning practice has become much busier over the last few years.  Elder Law and Disability Planning share many similarities.  Most of us do not realize that there are a substantial number of disabled persons in our communities.  Government statistics indicate that possibly 20% of the population suffers from a disability of one sort or another.  Not all people with disabilities require accommodation but the numbers are staggering.

Whether your loved one is mentally or physically disabled, planning is essential. Many persons with a disability receive government funding and benefit from programs that may be discontinued if they receive an inheritance directly.  Many cannot manage money and will dissipate funds that can be used to enrich their lives.  Many need continuing social and financial guidance that may be discontinued if the caregiver gets ill or passes away.

An issue we see frequently is the need for a guardian for an adult disabled child.  Once an individual reaches 18 years old in Pennsylvania she is no longer a minor.  That means she can make her own decisions regardless of her abilities.  Under federal privacy rules medical care providers are prohibited from giving out information to unauthorized individuals.  Just because your family doctor continues to listen to you as a parent (even though technically that may be a violation) other medical care providers and financial institutions may not. Without consent, which often may be unavailable due to the disability, the parent or caregiver is often in need of an emergency guardianship at the most inopportune time (i.e. in emergent medical situations).  While many public social service agencies suggest against guardianships because it requires an extra step on their part, the appointment of a guardian often puts control where it needs to be, with the family.

Questions: Is there a proper trust set up? Is there adequate assets or life insurance for their needs?  Does a guardian need to be appointed?  Is there a decision maker ready to take over?

Planning ahead for the needs of a disabled loved one requires the caregiver and the advisor to consider what will happen if the caregiver can no longer give care.

DRA Update: The Saga Continues

The Deficit Reduction Act has been described with hatred over the last few months in this newsletter.  In addition to being a generally bad piece of legislation, it is apparently constitutionally faulty.  Several members of congress will file a lawsuit to block implementation of the law (hoping, we guess, that enough new members of Congress are elected in November to kill it fro good).  The United States Constitution requires all legislation passed by the House and Senate to be identical.  Apparently the versions approved by the House and Senate were different and the President knew this and signed it anyway.  Isn't politics grand.

Cashing In Annuities

Annuities are heavily (over) sold to seniors.  An annuity is usually a single or multiple payments to an insurance company that grows tax-deferred until you take out the money in a lump sum or as payments, or a combination of both.  Payments may be guaranteed or not.

While an annuity can often be a fair replacement for a CD, caution has to be exercised when dealing with surrender charges.  A surrender charge is a penalty for withdrawing principal from the annuity and is a percentage of the amount withdrawn.  Annuities can have surrender charges that last up to 14 years.  Generally, annuities with a surrender period longer than 5 years should be suspect unless it has specific benefits or is for a specific purpose. Typically the longer the surrender period, the larger the commission to the salesman.

Sometimes things change and you decide you need the money that is in the annuity.  Often the surrender charge can eat up a large portion of the annuity if the withdrawal is made shortly after the purchase.  There are companies that buy annuities at a discount.  Sometimes these companies offer a better deal than the company where you bought the annuity. Sometimes not.  These companies are not charities, they are in business to make a profit.  Some larger ones are J.G. Wentworth (www.jgwfunding.com) , Peachtree Settlement (www.settlementfunders.com), Settlement Capital (www.setcap.com), Stone Street Capital (www.stonestreet.com).

Interest Rates 

Several years ago mortgage rates dropped to the lowest levels in 40 years, with 0 point 30 year fixed rates in the low 5% range. Rates have gone up since then but are still pretty low  historically with 0 point 30 year fixed rates in the mid 6% range.

Many people who have taken out mortgages with adjustable rates are regretting that decision as their monthly payments increase.  Also those that have taken out interest only or negative amortization loans (you pay a monthly payment less than you need to reduce the principal and the principal rises not falls over the life of the loan) are getting nervous as well.

If you are in one of these situations it is better to try to refinance now while your credit score is good to avoid problems later.

In addition to Elder Law, our firm practices real estate law and originates mortgages. Please call us at (610) 940-0650 with any questions or for rate quotes.

Job Hunting

Mistakes People Make:

1. Talking Too Much: Do not speak more than a minute or two at a stretch.  Spend only 1/3 of the time talking and 2/3 listening if it is the first interview with that employer.  A little more is OK if on a second interview.

2. Being Too Open: Don't discuss topics that may hurt your negotiating position (i.e. your current employer is doing badly and may be laying you off) or disparage a current or past employer.

3. Using Your Cell Phone: Do not answer calls during the interview.  It does not make you look important, it makes you look disrespectful.

4. Being Unprepared: Be ready to explain why you will be an asset to their organization.  If you tell the interviewer that you increased sales 20% in your division, be ready to explain how.

5. Dressing and Acting Inappropriately: Dress professionally and not like you are going to a club to appeal to the opposite sex.  Use appropriate language and show respect to the interviewer.  If you are having a meeting at a restaurant, drink non-alcoholic beverages and mind your manners.

*WE WANT TO HEAR FROM YOU.  TELL US WHAT YOU THINK, GOOD OR BAD*

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Robert Slutsky, Esq. has been practicing Elder Law for 14 years.  He helps families in Montgomery, Delaware, Philadelphia, Chester and Bucks Counties.  Mr. Slutsky has represented  local Area Agencies on Aging, long term care facilities and was a member and officer on the CAPS Board of Directors for over 10 years. Home visits are available. You may reach him at (610) 940-0650, robslutsk@comcast.net or the website at www.slutskyelderlaw.com.

DISCLAIMER: The content of this Newsletter is for general information only.  It is not intended to be legal, tax, financial, medical or other advice.  The reader should obtain legal, tax, medical or other advice from a competent professional to address his or her specific needs. We do not endorse any particular service provider. If a service provider is mentioned in an article it is simply because we may have come across them in our travels and cannot speak to their quality of service or integrity.